DENVER, June 9 (UPI) -- U.S. corporate junk bonds are coming back into favor among investors recently scared away by downgrades of General Motors Corp. bonds.
Qwest Communications International Inc. of Denver responded to the recent strong demand for corporate junk bonds by raising its offering by $500 million to $1.75 billion.
And DirecTV likewise took advantage of the capital markets' buoyancy to sell $1 billion of new bonds, just two months after it had decided to sell half that amount, the Financial Times reported Thursday.
Qwest's bond rating is three notches below investment grade; DirecTV is two notches below investment grade.
"The market's recent rally was enough to turn the new issue tap back on," said Kingman Penniman at KDP Advisors. "There is no longer an aversion to risk and a flight to safety."
"Buyers have got tons of money to invest," said one debt syndicate manager in New York, who said however that issuers were still hesitant in coming to the market, fearing that Treasury yields could fall further and lead to even lower borrowing costs.
